What holds Britain back is an ineffective government

Hong Kong and Singapore have bounced back strongly from recession, unlike
Britain, and what make the difference is they have leaders who deliver
whether it is providing vital infrastructure, education, or law and order.

The city states of Hong Kong and Singapore have shaken of the financial crisis through good government.Photo: imagebroker / Alamy

There is nothing like a foreign visit to put domestic issues into perspective. I have just returned from a business trip to Asia and I am all agog.

I will not bore you with the superlatives that are now commonplace about the growth of India and China. It is not these countries that set my mind racing. After all, both cover huge territories with enormous populations and their current high rates of economic growth are largely a reflection of their low starting point on the development ladder.

What's more, in both countries the average person is still extremely poor – especially in India. And, despite all the hype, both could yet falter in their path to full development and hence fail to achieve the superpower status that everyone now thinks is assured.

For me, the interesting questions are posed by the two city states of Hong Kong and Singapore. Both suffered in the world downturn, but both bounced back strongly. This year their growth should be 7pc and 15pc respectively. All the signs are that over the next few years they should grow by 4pc-5pc. By contrast, the UK will probably struggle to grow by even 2pc. And the difference is palpable.

Unlike the comparison with China and India, the contrast with the UK cannot be put down to these countries' low level of development. In Hong Kong, per capita GDP is almost as high as in the UK and in Singapore it is higher.

Nor can the UK's lack of space provide an answer. Both Hong Kong and Singapore are small territories. Indeed, Singapore is not much bigger than the Isle of Wight, but with a population of about 5m and an economy now almost as big as the whole of Malaysia.

So why the difference?

The first thing to strike you about these two city states is the people – hard-working, disciplined, committed, ambitious and law-abiding. But why?

You are drawn towards the conclusion that it is something to do with government – but that is not synonymous with either big government or no government. Hong Kong and Singapore are very different in style – Hong Kong free-wheeling and buccaneering, while in Singapore the government is interventionist and nannying, often to an annoying degree.

But in both cases government is effective. What it does, it does well – whether that is the provision of vital infrastructure, education, or law and order.

What strikes me about the UK is how many of the things which hold us back fall into government's sphere.

We have big government – but it is spectacularly ineffective government. Whether it is the egregious failure and gross waste of our social security system, or the degenerate state of our education standards, our transport infrastructure, or the travesty of the protection supposedly offered to the citizen against crime, it is the same story: huge amounts of money spent to little good effect.

We seem to have the worst of both worlds – big government, which makes a nuisance of itself and costs a fortune, but which achieves very little.

It is part of our tradition in the West, especially in Britain, that the state's power should be tightly circumscribed by law, and that law-abiding citizens should not fear the holders of government office. This is something we can be proud of. But we have gone much further. In the UK the state is now the subject of widespread contempt. When society needs the state's organising and protective power that is a disaster.

Can we take comfort from the fact that we in Britain have developed so far that further material success is unnecessary and unwanted? I do not think so. Many Asian countries are not stopping once they get to Western levels of income and development.

The loss of Western countries' relative position compared to Asia implies a huge loss of power – and that will have cultural and political as well as economic implications. It not as though everyone in our society lives life to a high standard, as a look around any British inner city will testify. The amounts spent weekly on buying lottery tickets give ample confirmation of people's financial aspirations.

Don't worry, I am not all starry-eyed about Asian values. I know that neither Hong Kong nor Singapore is a democracy in the British sense. And many Asian countries face problems of regime continuity.

Moreover, the British system has proved to be a promoter of individual freedom and a defence against tyranny – at least so far - but it has also proved to be ineffectual in fostering economic development.

I wonder what will happen when the British people wake up to how badly their leaders have governed them.